Apartment, Villa and Office Rental rates continued a downward trajectory and recorded quarterly declines of 3%, 2% and 3%, respectively. Annual changes remained more or less in double digits with drops of 12%, 9% and 12%, respectively. Asteco anticipates that this trend is likely to intensify.
Whilst the softening market conditions may be good news for some residents looking for discounts and incentives, we expect a reduced number of new leases and relocations as Tenants are likely to adopt a wait-and-see approach to re-evaluate their circumstances once the restrictions have been lifted.
Government initiatives continued to be rolled out to increase transparency, boost confidence and ultimately increase investment into the market. Despite these efforts, prolonged economic headwinds mainly due to oil price tensions and the global pandemic, are likely to continue to weaken employment growth and spending, which will dampen Real Estate investment.
The continuous delivery of new supply during a period of restrained economic growth has put pressure on Residential rents with Apartment and Villa rates declining by 2% and 3% since Q4 2019, and 5% and 4% compared with the same period last year.
Incentives, such as multiple cheques (with some offering up to 8 cheques) and rent-free periods, have become a norm, and Tenants are increasingly looking for value-for-money properties. Office demand levels continued to below, and similar to the Residential sector, Landlords provided discounted rates on contract renewal in order to retain Tenants.
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Information Credits: Asteco